MSE News: EU overhaul leads to faster electronic payments

JacksterD

NFH wrote: »

But just above, you said that the transactions are reflected in your updated balance but don't show yet as transactions on your account. That seems ideal, because you know your projected balance, but for interest calculations etc the value dates are later, i.e. in your favour.

That may have been the case once, but considering no banks will give anything above ~0.12% in interest, and if they do then it's just a limited term offer, there's really no advantage to the customer of delaying the posting of a transaction to your statement.

In fact, it's likely to be to the disadvantage of thousands of bank account holders, because I imagine it will make it much harder for some people to keep on top of their finances.

turbo.jet

JacksterD wrote: »

That may have been the case once, but considering no banks will give anything above ~0.12% in interest, and if they do then it's just a limited term offer, there's really no advantage to the customer of delaying the posting of a transaction to your statement.

In fact, it's likely to be to the disadvantage of thousands of bank account holders, because I imagine it will make it much harder for some people to keep on top of their finances.

Hear hear! It just confuses matters when you have to keep a close eye on how much money you have towards the end of each month.

PaulChelt

I've noticed this month the banks are gettting their own back: using a credit card on last day of month would normally have gone onto next month's statement due to clearing. This time spending on 31st Dec was cleared on 3rd Jan but still appeared on my Dec statement.

NFH

JacksterD wrote: »

That may have been the case once, but considering no banks will give anything above ~0.12% in interest

There are other scenarios where this makes a difference, for example if you have an offset mortgage. It's nevertheless in the customer's favour, so not something to complain about. You should never consider your displayed intraday bank balance as reliable anyway; you should keep track of each transaction and know how much is in your account.

turbo.jet

I disagree, in my circumstances its not in my favour. I can appreciate how it might be for some people though.

My original point was that there is no reason for it to not be instantaneous as it is in countries with more developed financial transaction systems (where offset mortgages came from! )

NFH

turbo.jet wrote: »

I disagree, in my circumstances its not in my favour. I can appreciate how it might be for some people though.

It is reasonable for banks to assume that post-dating value dates for debit transactions is in the customer's favour in nearly all cases. Even if the interest rate is very low, it's still in your favour. It could even prevent an unauthorised overdraft fee. It's up to the customer to maintain their own real-time record of their balance. Bank customers managed to do this in the days of cheques.

Why not use a credit card instead of a debit card anyway? With a debit card you pay 100% of the purchase price; with a credit card, you shouldn't pay more than 99% (because of cashback, air miles or points etc). By all means carry on using debit cards if you want, as you subsidise people like me who use credit cards.

turbo.jet

NFH wrote: »

It is reasonable for banks to assume that post-dating value dates for debit transactions is in the customer's favour in nearly all cases. Even if the interest rate is very low, it's still in your favour. It could even prevent an unauthorised overdraft fee. It's up to the customer to maintain their own real-time record of their balance. Bank customers managed to do this in the days of cheques.

For starters, I'm not talking about low interest... I'm talking about no interest. HSBC do not pay interest on the positive balances on their current accounts. Also, my point is that it would be less confusing if transactions instantly reflected in your list of transactions displayed by the bank, as has been proven possible in other countries. Simple.

I don't see how it could avoid unauthorised overdraft fees if everything was instantaneously reflected and we only spent money we knew we had. People seeing a balance that doesn't take into account money they've already spent but may have slipped their mind definitely could result in unauthorised overdrafts however.

You're right, it is our responsibility to keep track, its just a shame we can't use the 'balance' shown in our internet banking to do so... that's my point - that it would be nice if we could. Instead I have to laboriously and constantly maintain a seperate spreadsheet.

NFH wrote: »

Why not use a credit card instead of a debit card anyway? With a debit card you pay 100% of the purchase price; with a credit card, you shouldn't pay more than 99% (because of cashback, air miles or points etc). By all means carry on using debit cards if you want, as you subsidise people like me who use credit cards.

Ignoring the smug superiority with which you talk about those of us who use debit cards instead of credit cards, I can only comment on my own situation. I only recently got myself out of 10 years worth of debt which at its worst topped 20k (see signature - I'm proud of it). Some people aren't able to trust themselves to spend on credit cards and be able to pay it all back each month. I'd like to reach this point one day, but just now I don't think it would be wise. I do use my credit card for work related expenses as I can rest assured the company will pay it off in full.

In the meantime I'm proud of the fact I don't have to use credit cards.

blueberrypie

turbo.jet wrote: »

I don't see how it could avoid unauthorised overdraft fees if everything was instantaneously reflected and we only spent money we knew we had. People seeing a balance that doesn't take into account money they've already spent but may have slipped their mind definitely could result in unauthorised overdrafts however.

Those who are unable to keep track of how much money is in their bank account are quite likely also to be unable to remember that there's a Direct Debit due to go out tomorrow, or bills due to be paid at the end of the week. Therefore they'd end up overdrawn anyway.

I don't believe banks should treat their customers like children. As adults, we should be capable of managing our own money. Clearly some people can't - but I suspect that even more hand-holding by the banks would only lead to people taking even less personal responsibility.

turbo.jet

So just to clarify, you are suggesting that if I was to walk into a shop and buy something with my debit card, and see the transaction instantly appear on my internet banking transaction list, this amounts to "hand-holding" by the banks? I think it just amounts to [STRIKE]21st[/STRIKE] sorry, 20th century technology being employed.

It never ceases to amaze me how this site, which has large sections dedicated to helping people who struggle with money, largely due to the way debt has been sold to them and having been educated into debt, can also contains other sections so full of people who are so self-righteous and unsympathetic to people who don't possess a natural ability in financial management.

I actually believe that we are the bank's customers and by giving them our money, they have a duty of care and so what if people need a bit of hand-holding sometimes (if I were to even agree that is what we are talking about, which I don't).

blueberrypie

turbo.jet wrote: »

So just to clarify, you are suggesting that if I was to walk into a shop and buy something with my debit card, and see the transaction instantly appear on my internet banking transaction list, this amounts to "hand-holding" by the banks?

No, I'm suggesting that an adult should be keeping track of his or her own financial situation without relying on the bank to tell him or her about it.

I think it just amounts to [STRIKE]21st[/STRIKE] sorry, 20th century technology being employed.

Even in the 21st century (that's the one we're in now), banks don't have adequately-functioning crystal balls. They don't know that a DD is about to be taken or that the funny noise your car is making is about to cost you £500 - so they are not in the position to keep track of your finances for you.

It never ceases to amaze me how this site, which has large sections dedicated to helping people who struggle with money, largely due to the way debt has been sold to them and having been educated into debt, can also contains other sections so full of people who are so self-righteous and unsympathetic to people who don't possess a natural ability in financial management.

At one time I was quite heavily in debt. I'm not self-righteous or unsympathetic. But I would never have got out of that debt if I hadn't taken responsibility for doing that myself. And I don't blame the banks or the credit-card companies for that debt. I spent the money, I failed to budget. They allowed me to do so, but they never forced me.

I actually believe that we are the bank's customers and by giving them our money, they have a duty of care and so what if people need a bit of hand-holding sometimes (if I were to even agree that is what we are talking about, which I don't).

Banks are businesses, not charities. They're there to provide a service and to make a profit. Relying on them to look after us is foolish. People who aren't foolish realise that they have to look after themselves.

And it's really not that difficult. People used to manage their bank accounts without on-line banking - heck, even without cash machines. They figured out for themselves how much money they had and how long it had to last before they got paid again, and how much cash they needed and how long that had to last until the bank opened again. It's lovely having ATMs and on-line banking and Faster Payments and all the rest - I'm a big fan of that technology. But it doesn't take the place of knowing *for yourself* whether you can afford something this week or not.